Europe

Home page

Europe

EU leaders still at odds over budget cuts

22 November 2012 19:49 (UTC +04:00)

Baku-APA. Top leaders of the European Union (EU) on Thursday began hard talks over the bloc's budget framework for 2014-2020 at a crucial summit amid competing demands of member states that could lead to all-night bargaining, APA reports.

The aim was to ensure that the EU would have enough funds to function, taking unavoidable fiscal constraints into account, European Council President Herman Van Rompuy said in an invitation letter.

Van Rompuy, reportedly determined to strike a deal after his budget cuts proposal triggered fierce debates, held one-on-one talks with 27 national leaders from morning till night to smooth negotiation obstacles.

"The absence of an agreement would be harmful for all of us," the president said, adding that the two-day summit would be prolonged if necessary.

The so-called multiannual financial framework is to decide the ceiling and structure of EU spending over a seven-year period, which also shapes the bloc's policy priorities, although its actual budget is decided annually in separate negotiations.

Maintaining or increasing the trillion-euro budget from the 2007-2014 period is preferred by a few member states including Greece, as well as the European Commission and the European Parliament.

The other camp, led by Britain which threatened to veto any budget increase, called for EU-level austerity at a time of crisis, despite disagreeing with each other over which projects should be cut.

"At a time when we are making difficult decisions at home over public spending, it would be quite wrong, it is quite wrong, for there to be proposals for this increased extra spending in the EU," British Prime Minister David Cameron said after arriving in Brussels.

In the meantime, Cameron vowed to protect Britain's rebate from being cut in the budget, which is worth about 3.6 billion euros (4.6 billion U.S. dollars) a year.

All other member states have their own national agenda, such as France resisting cuts in the agricultural sector and poorer member states in central and east Europe opposing cuts in infrastructure spending.

The meeting is likely to continue until Saturday if talks do not collapse, while German Chancellor Angela Merkel said another budget summit could be necessary early next year.

A source of both solidarity and tension, the EU budget in particular reflects the conflict of national interests, as well as opposing arguments on how to fix the crisis and save Europe's future.

If no deal can be reached by the end of next year, the 2013 budget ceiling will be rolled over into 2014 with 2-percent inflation adjustment, which may bring much uncertainty for long-term projects.